Yes, I guess the experience since the peak in Japan has mostly been CPI deflation.

Is that the CPI index or a rate of annual change in CPI (often falsely just called "CPI")? If the latter is true (which it seems, seeing the scale), then I only see very little "CPI-deflation" (negative annual rate of change in CPI) post '98.

Is that the CPI index or a rate of annual change in CPI (often falsely just called "CPI")? If the latter is true (which it seems, seeing the scale), then I only see very little "CPI-deflation" (negative annual rate of change in CPI) post '98.

Yes, it's the annual change. Japan's consumer prices peaked in 1998, according to this site:

"After spending many years in Wall Street and after making and losing millions of dollars I want to tell you this: It never was my thinking that made the big money for me. It always was my sitting. Got that? My sitting tight!" --Jesse Livermore

"We are reaping what has been sown over the last three decades of creating a grotesquely unequal society with an ethos of grab as much as you can by any means. A society of looters created by MPs and their expenses, bankers and their bonuses, tax-evading corporations, hacking journalists, bribe-taking police officers, and now a group of alienated kids are seizing their chance. This is not to condone but to understand." - John McDonnell MP

"Things got a bit out of hand & we'd had a few drinks. We smashed the place up and Boris set fire to the toilets."David Cameron, 7th June 1986.

The Fed minutes warned......"The Committee would need to consider whether further policy stimulus might become appropriate if the outlook were to worsen appreciably," it said. The economy might not regain its "longer-run path" until 2016.

"The Fed is throwing in the towel," said Gabriel Stein, of Lombard Street Research. "They are preparing to start QE again. This was predictable because the M3 broad money supply has been contracting for months."

"The worm is turning," said David Bloom, currency chief at HSBC. "We're in a world of rotating sovereign crises. The market seems to become obsessed with one idea at a time, then violently swings towards another. People thought the euro would break-up. Now we're moving into a new phase because we're hearing alarm bells of a US double dip."

Jaw-boning manipulation of the market? Whatever the real game plan is, increasing currency instability looks like the only certainty.

Modern money "shorts" the currency, and is backed by debt. The debt is real. A debt deflation will lead to a prolonged period of deleveraging, where the short-covering of currencies will strengthen currencies relative to asset prices. At the global level, in the FX market, central currencies will benefit from deleveraging at the expense of peripheral currencies. Due to instability and uncertainty, gold will benefit against all currencies as it continues to be re-monetized.

Hold on to your hats for hyper-deflation, where cash is king, and gold the King of cash.
[Silver? A Volatile Queen].

If gold market participants were all tank drivers their machine would have but one gear – reverse. The smallest book in the world is the book of confirmed gold price visionaries.

Someone says deflation and the long gold positions hit the fan. Gold banks make their short covers even though the fuel in Bernanke’s Helicopter Money Drop is founded in the dreaded use of the “D” word.

People are so fixed in present time that they cannot picture a euro back towards its high and the dollar back towards its low because the financial condition of the USA dwarfs the problems of Europe.

Hyperinflation is always the product of a loss of confidence in currency resulting in a “Currency Produced Cost-Push Hyperinflation.”

No one with a synapse talking to another synapse expects a “Demand-Pull Inflation.”

All hyperinflation in modern history has occurred for one reason, and one reason only. That is loss of confidence in currency.

Loss of confidence in a currency can be brought about by many reasons, but there is one constant factor. When hyperinflation has occurred in modern history EVERY economy involved was decimated as and when it occurred.

It has never been caused by “Demand-Pull,” but always and without exception caused by “Currency Induced Cost Push Hyperinflation.”

The nonsense being spread by the F-TV taking heads is that the Fed is out of ammunition to fight deflation. That is raving BS. The Fed can and will do QE to infinity which is restricted as a tool by nothing whatsoever. The ECB will not be far behind the Fed.

Argue all you want, but this is exactly what is going to happen starting now. Stop being glib. Study hyperinflation in modern times listed below before you ask me to explain it one more time.

What is out there today QE wise is enough to result in hyperinflation as confidence falls in currencies due to two characteristics, QE and volatility.

Try meditating on the concept of “Currency Induced Cost Push Hyperinflation,” rather than loading your pants over gold banks manipulation full of sound and fury, but meaningless in the great scheme of things.

Excuse me, but I am asking a SERIOUS question, and an important one.And I have asked it repeatedly, and I have been hoping for better "boiler plate" answers than that!

Here are some possible answers, none which do I find very satisfying:

+ "Citizens Income" - Money will be "printed" and mailed out as cheques to all citizens(this simply cheats those who work and pay taxes, and would be unpopular amongst Tea party people etc)

+ "Lend it out" - encourage (nationalised?) banks to lend aggressively against various assets (housing?)(this has been done already in a limited way, and is an important source of our present problems.)

+ "Bailout industries" - the government takes over failing companies, and asks them to go on hiring sprees,with losses covered by QE

Have you got any better ideas?

The market is "bipolar", swinging back and forth from a focus on Inflation to Deflation. Bet on swings; and stay flexible. What are bipolar markets? See: http://tinyurl.com/GEI-Manix

Excuse me, but I am asking a SERIOUS question, and an important one.And I have asked it repeatedly, and I have been hoping for better "boiler plate" answers than that!

Here are some possible answers, none which I do not find satisfying:

+ "Citizens Income" - Money will be "printed" and mailed out as cheques to all citizens(this simply cheats those who work and pay taxes, and would be unpopular amongst Tea party people etc)

+ "Lend it out" - encourage (nationalised?) banks to lend aggressively against various assets (housing?)(this has been done already in a limited way, and is an important source of our present problems.)

+ "Bailout industries" - the government takes over failing companies, and asks them to go on hiring sprees,with losses covered by QE

Nothing like the US government bailing one out for the stupidity of investing in a ponzi kabal. Earlier today, the FDIC decreed that it would increase deposit insurance for depositors in banks that failed in 2008 in the states of MO, AR, CA, FL, KS and NV. As a result of this action, 9,500 depositors would end up receiving between ten and hundred and fifty thousand dollars, courtesy of a retroactive increase in the "maximum deposit insurance amount to $250,000." The rule was made retroactive beginning January 1, 2008. Pretty soon, all money ever lost, be it in bankrupt banks, or in bed investment will be recoupable, as the administration does everything it can to get some cash - any cash - in the hands of Joe Sixpack.

Industrialized countries must instigate plans to cut public spending and raise taxes immediately in order to consolidate the present recovery, European Central Bank President Jean-Claude Trichet said.http://www.cnbc.com/id/38375912

"After spending many years in Wall Street and after making and losing millions of dollars I want to tell you this: It never was my thinking that made the big money for me. It always was my sitting. Got that? My sitting tight!" --Jesse Livermore

Interests:Trading and investing in stocks and commodities. Writing articles on related subjects, while building this website. I am interested in creating ways for communities

Posted 23 July 2010 - 10:06 AM

QUOTE (chris ct @ Jul 23 2010, 01:38 PM)

Here's a slight answer:http://www.zerohedge...-depositors-faiPretty soon, all money ever lost, be it in bankrupt banks, or in bed investment will be recoupable, as the administration does everything it can to get some cash - any cash - in the hands of Joe Sixpack.

The very sad thing is:Our political leaders seem to think that by feeding cash to people, and thereby maintaining consumer DEMAND that they are helping the economy. They are not really thinking clearly about the STRUCTURE OF THE ECONOMY, and in particular, the needed balance between goods being produced and genuine needs.

The stupidity of the existing approach was glaringly obvious when they came up with "cash for clunkers." Everything about it shouted Malinvestment. Still servicable older cars - which were fully paid for! - were scrapped and replaced with expensive new cars, where the buyer is now stuck with a car payment. Some of these people may now be out of work, and be asking for another govt handout, so they can keep those payments up. What absurdity! This is no way to restore an economy to health. Instead, intelligent and PRODUCTIVE investments need to be made, and productive jobs created in industries that add something to the economy.

The market is "bipolar", swinging back and forth from a focus on Inflation to Deflation. Bet on swings; and stay flexible. What are bipolar markets? See: http://tinyurl.com/GEI-Manix

Answer: You ask the wrong question. No money needs to be in people's hand for prices to rise. When confidence wanes, money will lose value, no matter in whose hands it is.

EDIT: Keep in mind that in a hyperinflation no one ever has enough money. There is a general lack of money. That's why so much has to be created first place.

EDIT2: DrBubb comes into GF's corner store and ask how much the potatoes are. GF says: $X. Bubb says, oh, ok, but unfortunately I have no money. GF says, no problemo, come back tomorrow. Then, overnight, the Fed monetizes another trillion or two. DrBubb comes back next morning, and asks GF: how much are the potatoes. GF says: $3X. Bubb says, oh wow, that's suddenly very expensive, but unfortunately I still have no money at all. GF says, no problem, come back later. Meanwhile GF will sell the potatoes to the Fed's cantina and to Pimco's favourite restaurant, because the money is somewhere (for instance at Pimco, because they sold all their $h1te to the Fed), even if the 'people' don't have it.

Answer: You ask the wrong question. No money needs to be in people's hand for prices to rise. When confidence wanes, money will lose value, no matter in whose hands it is.

EDIT: Keep in mind that in a hyperinflation no one ever has enough money. There is a general lack of money. That's why so much has to be created first place.

EDIT2: DrBubb comes into GF's corner store and ask how much the potatoes are. GF says: $X. Bubb says, oh, ok, but unfortunately I have no money. GF says, no problemo, come back tomorrow. Then, overnight, the Fed monetizes another trillion or two. DrBubb comes back next morning, and asks GF: how much are the potatoes. GF says: $3X. Bubb says, oh wow, that's suddenly very expensive, but unfortunately I still have no money at all. GF says, no problem, come back later. Meanwhile GF will sell the potatoes to the Fed's cantina and to Pimco's favourite restaurant, because the money is somewhere (for instance at Pimco, because they sold all their $h1te to the Fed), even if the 'people' don't have it.

Bubbs point is a good one. Asking "how to get money into people's hands" is another way of saying the velocity of money has collapsed. The less velocity money has, the less the value of money will have relative to goods and assets; you will have less money "chasing" X.

The quantity theory of money, where the value of money is denominated by the amount of units a central bank produces, is a fallacy being falsfied once again right before your eyes..... all seen before in lquidity traps.

The relative value of money is just as dependent on human behaviour.

If you're interested, read the Money Illusion Redux thread.

Edit: the loss of confidence is in debt not money per se.

The "way out" by central banks of infinite monet printing is blocked by bond vigilantes. Investors [and central banks] are now very cognizant of sovereign debt.

A currency resetting/ event is always possible but will not be hyper-inflationary. It would involve a rebalancing of currencies on the world stage.

Modern money "shorts" the currency, and is backed by debt. The debt is real. A debt deflation will lead to a prolonged period of deleveraging, where the short-covering of currencies will strengthen currencies relative to asset prices. At the global level, in the FX market, central currencies will benefit from deleveraging at the expense of peripheral currencies. Due to instability and uncertainty, gold will benefit against all currencies as it continues to be re-monetized.

Hold on to your hats for hyper-deflation, where cash is king, and gold the King of cash.
[Silver? A Volatile Queen].

Bubbs point is a good one. Asking "how to get money into people's hands" is a colloquial way of saying the velocity of money has collapsed. The less velocity money has, the less the value of money will have relative to goods and assets; you will have less money "chasing" X.

The quantity theory of money, where the value of money is denominated by the amount of units a central bank produces, is a fallacy being falsfied once again right before your eyes..... all seen before in lquidity traps.

The relative value of money is just as dependent on human behaviour.

If you're interested, read the Money Illusion Redux thread.

Edit: the loss of confidence is in debt not money per se.

The "way out" by central banks of infinite monet printing is blocked by bond vigilantes. Investors [and central banks] are now very cognizant of sovereign debt.

A currency resetting/ event is always possible but will not be hyper-inflationary. It would involve a rebalancing of currencies on the world stage.

yes agree, there is some weird conceptions from the gold bug delusionary hyper-flat-balloons society that we all should buy the precious to feed the gold bubble